More Startups Founders Are Tackling Addiction: Here’s Where The Money Is Going
Crunchbase News
June 25, 2021
For founders and investors in startups focused on addiction recovery, their attraction to the space often begins with a personal story.
Stephen Hays, a mental health-focused venture investor, attributes his motivation to find and fund new treatment approaches in part to his own struggles with alcoholism. Years of failed attempts at sobriety culminated in an in-patient rehab stay a few years ago that left him physically and mentally healthier but financially devastated.
Now, as he searches for promising startups for his investment syndicate What If Ventures, Hays sees a lot of founders sharing similar histories. While struggles around addiction are nothing new, he points to a more recent shift in peoples’ willingness to both talk about their experiences and seek out better options.
“What I think has happened is the normalization of the conversation around addiction has freed founders who struggled with it themselves to go build in that space,” Hays says.
Diminished stigma is only one part of the picture. Add in sharp growth in adoption of telehealth technologies, along with a continually improving body of evidence around effective treatment approaches, and you have a sort of perfect storm for startup funding around addiction.
The numbers bear out that notion. A Crunchbase survey found that venture-backed companies working on treatments and service offerings around addiction have raised well over $1 billion in funding over the years.
More recently, we’re seeing a high amount of seed and early stage activity. A Crunchbase sample list of U.S. companies, for instance, found 21 upstarts in the addiction space, most seed or early stage, that raised rounds in the past couple of years.